# How Do I Calculate the Cost of Sales?

There are two common methods of calculating cost of sales: direct costing and absorption costing. Using the direct costing method, add the cost of material and labour involved in preparing your item for sale. In absorption costing, add the material and labour plus overhead expenses, such as lease, utilities and office expenses.
Q&A Related to "How Do I Calculate the Cost of Sales"
 1. Calculate your cost of sales using the direct costing method when you're presenting the numbers for management reports. Direct costing is the most basic way to figure your costs; http://www.ehow.com/how_2304419_calculate-cost-sal...
 I'm I right by stating! % of cost = cost of sale divided by sales = % I want to use this in matrix. I want to make sure the selling price that we are going to charge (based on volume http://wiki.answers.com/Q/How_do_you_calculate_per...
 'Cost of Sales' (COS) is the total of all the costs involved in preparing each product for sale. COS is also known as 'Cost of Goods Sold' or COGS. This concept is very relevant for http://www.quora.com/Startup-Advice-and-Strategy/H...
 1. Determine how many kilowatts each of the lights in your home uses. Check the sides of lightbulbs to determine their wattage. Multiply the wattage of each one by the average number http://www.ehow.com/how_10056313_calculate-hydro-c...